Launch Strategy Options         December 15, 2003          Orlando Moreno           407.808.0322       omoreno@hotmail.com1
Launch Options    The choice of launch strategy consists of a number of tradeoffs:      −   Speed to market         vs.  ...
Launch OptionsThere are a range of launch alternatives available, each of which balances thesetradeoffs. We’ve identified ...
Launch Options  Launch Option 1 – “Test Market” Approach                                                                  ...
Launch Options  Launch Option 2 – “Regional Rollout” Approach   Intermediate risk launch approach                         ...
Launch Options  Launch Option 3 – “Lead Market” Approach                                                               Pro...
Launch Options Choice Influences            Product                        Process                      Other Issues  Pro...
Launch Product Options                             Light Development                              Light Development       ...
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Launch options

  1. 1. Launch Strategy Options December 15, 2003 Orlando Moreno 407.808.0322 omoreno@hotmail.com1
  2. 2. Launch Options  The choice of launch strategy consists of a number of tradeoffs: − Speed to market vs. need for market learning − Brand risk vs. market opportunity − Investment availability vs. need to marshal funds2
  3. 3. Launch OptionsThere are a range of launch alternatives available, each of which balances thesetradeoffs. We’ve identified three specific launch plans for discussion. ut ll o et k et lR o rk M ar na M a st io ad Te R eg Le Most Aggressive Least Risky Slowest to Market Fastest to Market 3
  4. 4. Launch Options Launch Option 1 – “Test Market” Approach Pro’s • Trial period provides opportunity Least risk, slowest launch approach to revise Rev. 1.0 before • Limited geography commercial market entry (generally, 2-3 markets) nationwide rollout • Designed to test specific elements prior to launch commitment (e.g., consumer acceptance, systems operations, distribution) • “Go/No Go” decision is based on • Anticipates need for changes prior to national launch to incorporate test market learning • Go/no go decision points included in timing market results • Can be iterative – with multiple, sequential test markets • Ability to limit total costs (no advance commitments for Test Market Product Redesign Nationwide handsets and advertising)Market & Launch Prep RolloutEntry • Lowest total cost solution for a Rev. 1.0 Rev. 1.0 Rev. 1.1 or 2.0 trial 3-6 months 3-8 months Con’s (depending on modifications) • Difficult to replicate national • 6-10 stores per market • Maintain test market presence • 2,500+ store fronts results – marketing tools are • Limited media campaign – • Limited/no marketing • National media campaign limited local media, store circulars • 75-100K handset commitment • Narrow handset commitment • Slower nationwide entrance – (est. 3-5K) competitor risk, opportunity cost “Go/No Go” decision • High average cost (trial quantity For a “Go” decision to be handset customization, special For a “Go” decision to be implemented, TWDC needs 90-120 distribution arrangements, etc.) implemented, TWDC needs 90-120 days to place handset orders, stock days to place handset orders, stock retail distribution, place advertising, • Cannot accelerate nationwide retail distribution, place advertising, hire care staffing, and complete any rollout timing (due to lead times) hire care staffing, and complete any systems modifications and scaling. systems modifications and scaling. 4
  5. 5. Launch Options Launch Option 2 – “Regional Rollout” Approach Intermediate risk launch approach Pro’s • Region-by-region expansion from initial test market (regions usually tied to advertising or • Staged approach to full-scale distribution geographic alignments) investment and operations • Focus is on efficient scaling of systems and operations and controlling investment • Subsequent regional rollouts are not dependent on market results – only catastrophic failure delays • Maintains a fairly aggressive additional expansion expansion attitude • Phased rollout can also be done nationally with limited distribution – adds national presence, but offers additional marketing challenges • Limited opportunity to revise product incrementally before Lead Market Regional Regional Nationwide Market expansion Entry Introduction Expansion(s) Rollout (optional) Rev. 1.0 Rev. 1.0 Rev. 1.1 Rev. 1.2 Con’s < 1month 3-6 months 3-6 months • Relatively slow to market (including prep (including prep for next phase) for next phase) • Increased costs due to extended • 6-10 stores per market • Expand to regional • Expand to additional • 2,500+ store fronts inefficiency of operating without • Limited media campaign distribution (~500 stores) region(s) • National media campaign national scale • Narrow handset • Full marketing presence • Full marketing presence • 75-100K handset commitment within region • Additional handset commitment • Risk of competitive entry – • 15-20K handset commitment • Can consider product rev. opportunity for competitor to commitment 2.0, but forego some use launch and own late expansion of some market results regions“Go/No Go” decision “Go/No Go” decision “Go/No Go” decisionfor regional expansion for regional expansion for nationwide rollout & expansion product & rollout product 5
  6. 6. Launch Options Launch Option 3 – “Lead Market” Approach Pro’s • Fast nationwide market entrance Fastest, most aggressive launch approach (more likely to be first entrant to • Short, limited geography introduction to ensure systems and operational readiness (usually, 1-2 target audience) markets with nominal volume) • No expectation to modify product prior to nationwide launch – time only allowed for minor fixes • Opportunity to maximize launch • Launch is not dependent on lead market results – only catastrophic failure delays launch impact – “big event” focus without media and attention slippage during test market Lead Nationwide Product Refresh • Most efficient launch Market Market Rollout Entry – if all goes well, total resources are minimized Rev. 1.0 Rev. 1.0 Rev. 2.0 2-3 months <1 month 6-12 months 6-12 months Con’s • Minimal stores count • 2,500+ store fronts • Continued execution of “Go/No Go” decision based only on • No media • National media campaign growth plan and product market research and strategy “Go/No Go” • Focus on rapid • 75-100K handset roadmapdecision pre-launch • Need to modify product and process learning commitment • Steady product and systems while in market systems iterations to reflect market learning • Higher market research costs for For a “Go” decision to be product development (typically) For a “Go” decision to be implemented, 90-120 days for handset implemented, 90-120 days for handset production and customization, retail • Total cost exposure not production and customization, retail distribution, advertising placement, minimized, due to large handset distribution, advertising placement, customer care staffing, etc. commitment, large advertising customer care staffing, etc. budget, systems scaling, and care staffing 6
  7. 7. Launch Options Choice Influences Product Process Other Issues  Proven understanding of  Company risk profile  Timeliness of market customer opportunity  Time available for product  Internal decision making  Competitive risk development process  Research process  Requirement for market  Investment availability supporting confidence in results prior to expansion product7
  8. 8. Launch Product Options Light Development Light Development Moderate Development Moderate Development Intense Development Intense Development Product Product Product Product Product Product Description: • Pre-existing TWDC applications • Pre-existing TWDC applications • New & pre-existing TWDC applications (small number) (moderate number) (many more applications) • Minor UI modifications • Custom UI • Custom UI • Possible handset-billing integration Launch timing • Fastest path to market • 3+ months longer due to revision • 6-9 mo’s longer due to application implications: development and end-to-end testing Differentiation vs. • Medium to High • Medium to High • Very High Carriers: Initial product • Low to medium • Medium • High Initial Product Options complexity: Benefits: • Fast market entry • Relatively fast market entry • Highest degree of differentiation (but at • Lowest operational risk • Low operational risk risk of higher operational complexity)8

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